Solar project holds possibility of economic development

CPS will buy 30 megawatts of solar energy from SunEdison.

By Tracy Idell Hamilton

Published 9:47 pm, Thursday, October 7, 2010

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The San Antonio area is to get three more solar installations much like this one, called Blue Wing, a 150-acre solar farm owned by Duke Energy that soon will produce 14 megawatts of power for CPS Energy. SunEdison's proposed solar projects would be smaller but more efficient, thanks to advances in technology and dropping prices. less

The San Antonio area is to get three more solar installations much like this one, called Blue Wing, a 150-acre solar farm owned by Duke Energy that soon will produce 14 megawatts of power for CPS Energy. ... more

Solar project holds possibility of economic development

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Perhaps even more than the 30 megawatts of solar power CPS Energy has agreed to buy, city and utility officials are excited about the possibility of additional economic development its new partnership with SunEdison could bring.

SunEdison, one of the nation's largest solar service providers, will build, own and manage three new 10-megawatt solar installations in CPS' service area; the utility will buy all the power produced for 25 years.

While the agreement between the company and the utility is silent about additional investment, officials with both said that in the next three months, they will discuss several avenues.

CPS executives, while stressing that nothing is a done deal, say they have asked SunEdison to look at opening a regional office in San Antonio, collaborating with CPS' research partners on solar research and development, and opening an education center - perhaps at one of the installations.

"It's a little early to talk about details, but we are negotiating in good faith," said Cris Eugster, chief sustainability officer for CPS.

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Mayor Julián Castro, who has pushed hard to position San Antonio as a player in the new energy economy, lauded the effort.

"This is a perfect example of how we can leverage renewable energy investment to create more jobs across the opportunity spectrum," Castro said, "including R and D - and it's those R and D jobs that have eluded San Antonio too often in our history. This is a great opportunity to overcome that."

Officials with SunEdison were unavailable for comment, but a spokesman did confirm the company is in talks with CPS.

"Those are things that will be addressed within 90 days we just cannot talk about," Brad Oswald said.

The deal announced Thursday is the first Texas project for SunEdison, a publicly traded company headquartered in Baltimore with offices in several states, Canada and across Europe.

The company says it pioneered the purchase power agreement, which allows businesses and utilities to buy solar power without the outlay of capital, maintenance and other costs.

CPS CEO Doyle Beneby said the long-term fixed price also is a hedge against the volatility of fossil fuel prices, not to mention the possibility of some type of cap-and-trade legislation in the future, which likely would push fossil fuel prices higher.

He gloated a bit over the price CPS secured for the SunEdison deal, which sources say is 15 cents a kilowatt hour.

While not confirming that figure, Beneby called it "the lowest I've seen in the market across the country."

Halfway to solar goal

This is CPS' second solar purchase power agreement; it has a 30-year contract to buy all 14 megawatts produced by the Blue Wing solar farm, owned by Duke Energy, recently completed in Southeast San Antonio.

Blue Wing comprises about 215,000 thin-film panels, on 150 acres west of U.S. 181, that are fixed in place facing south.

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SunEdison's solar farms, to be built in locations still to be chosen, will produce more power with fewer panels, thanks to better technology.

The three installations' roughly 120,000 panels also will face south, but will track the sun east to west, generating more electricity during those crucial peak hours when costs are highest for the utility - costs it passes along to customers.

The panels also will use crystalline wafers, Eugster said, which are more efficient than thin film. At the time CPS signed its deal for Blue Wing, costs for that technology was prohibitively high.

SunEdison recently was acquired by MEMC Electronic Materials, which manufactures wafers and related products for semiconductor and solar industries.

That vertical integration will help keep costs low for CPS, Eugster said.

Taken together, Blue Wing and the SunEdison installations will give CPS 44 megawatts of solar power, almost halfway to its goal of 100 megawatts of non-wind renewable power by 2020. But it's still less than 1 percent of the utility's overall generation capacity, which stands at almost 7,000 megawatts.

Before the utility entertains any more purchase power agreements for solar energy, however, Beneby has directed Eugster's team to study the feasibility of CPS building and owning its own solar plant.

"We've got to make sure it's affordable," he said, "but my bias is to own solar."

Doing so would mean CPS could further control the potential for wider economic development benefits, Beneby said, by, for example, hiring local contractors and having components built here.

"If we could get it done at competitive rates, it's definitely something we would bring to the board and the City Council."